CONTRIBUTION OF MOBILE NETWORK

OPERATORS AND
BANKING INSTITUTIONS TO FINANCIAL INCLUSION
IN TANZANIA

A Research Project Report

Submitted in Partial Fulfilment of Course Requirements

Field Research Conducted: May 2026

Submission Date: June 2026

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ABSTRACT
This study investigated how Mobile Network Operators (MNOs) and banking institutions
have advanced financial inclusion across Tanzania. The research concentrated on
examining how digital financial innovations — spanning mobile money platforms, agent
banking, mobile credit, and digital savings — have broadened financial access, particularly
among rural and low-income populations historically excluded from formal financial systems.
The study adopted a descriptive and analytical design that merged desk-based secondary
research with qualitative primary data gathered through field visits, direct observations, and
stakeholder interviews conducted in May 2026.
Field-based evidence was drawn from two major MNOs — Vodacom Tanzania operating M-
Pesa and Airtel Tanzania operating Airtel Money — alongside two commercial banks,
namely NMB Bank Plc and Tanzania Commercial Bank (TCB). Secondary sources included
peer-reviewed journals, Bank of Tanzania publications, government policy documents, and
national financial inclusion reports.
Results indicate that mobile money platforms have been transformative in connecting
underserved Tanzanians to financial systems, particularly through zero-fee account
maintenance, instant mobile credit based on transaction history, and widespread agent
networks. Bank-MNO partnerships have further deepened inclusion through innovative
products such as TCB's Mkoba community savings service, CRDB's Songesha micro-credit
buffer, and Amana Bank's Halal Pesa Sharia-compliant offering. Government policy
frameworks and Bank of Tanzania regulatory oversight have collectively created a stable,
trustworthy environment for these digital financial innovations to flourish.

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CHAPTER ONE: INTRODUCTION
1.0 Introduction
Access to financial services is no longer considered a privilege but a fundamental enabler of
economic participation. Financial inclusion — the process through which individuals and
enterprises gain affordable, appropriate access to financial products including savings,
credit, insurance, and payment services — has emerged as a cornerstone of sustainable
development policy globally. When people can manage their finances through formal
channels, they are better positioned to invest productively, absorb economic shocks, and
contribute meaningfully to broader economic growth.
Tanzania's journey toward financial inclusion has been shaped by two parallel forces. First,
financial sector reforms initiated during the 1990s expanded the number of formally licensed
banks and financial institutions operating across the country. Despite this growth, large
segments of the population — particularly those in rural areas — remained disconnected
from formal finance due to infrastructural deficiencies, geographic remoteness, low
household incomes, and limited financial knowledge.
Second, the rapid expansion of mobile telecommunications infrastructure created an entirely
new pathway into the financial system. Licensed Mobile Network Operators including
Vodacom Tanzania through M-Pesa, Airtel Tanzania through Airtel Money, Tigo Tanzania
through Tigo Pesa, and Halotel Tanzania through HaloPesa began offering mixed product
portfolios that combined communications services with digital financial solutions. These
platforms enabled millions of Tanzanians to conduct financial transactions using basic
mobile phones, entirely bypassing the need for traditional bank accounts.
Simultaneously, commercial banks recognized the strategic opportunity presented by MNO
infrastructure and customer bases. Institutions such as NMB Bank Plc and Tanzania
Commercial Bank developed collaborative products with MNOs, creating a layered
ecosystem where mobile money and formal banking services reinforced each other.
Products ranging from Sharia-compliant mobile savings to community fundraising platforms
emerged from these partnerships, addressing diverse financial needs across Tanzania's
population.
The Government of Tanzania and the Bank of Tanzania have complemented these private
sector developments through targeted policy frameworks and regulatory architecture
designed to balance innovation with financial stability, consumer protection, and anti-
financial crime compliance. This report critically analyses the combined contribution of these
actors to financial inclusion in Tanzania, drawing on field evidence, institutional data, and
theoretical perspectives.

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CHAPTER TWO: LITERATURE REVIEW
2.1 Introduction
This chapter examines theoretical frameworks and empirical scholarship relevant to financial
inclusion, digital financial services, mobile money ecosystems, and banking innovation within
Tanzania's context. It reviews established scholarly positions, identifies convergences and
contradictions within the literature, and articulates the gap that this study addresses.

2.2 Understanding Financial Inclusion

Financial inclusion is broadly understood as the systematic effort to ensure that all
individuals — irrespective of income level, geographic location, or social status — can
access and meaningfully use formal financial services. The World Bank (2022) defines it as
equitable access to useful, affordable financial products and services, including transactions,
savings, credit, insurance, and payment systems, delivered in a responsible and sustainable
manner.
Stiglitz (1993), building on Financial Intermediation Theory, contends that financial
institutions serve the economy by bridging the gap between those with surplus funds and
those with financing needs, thereby reducing transaction costs and information asymmetries.
For Stiglitz, an inclusive financial architecture is essential for channeling productive
investment and integrating marginalized groups into economic life.
Sen (1999) approaches inclusion from a human capabilities perspective, positioning access
to financial services as a form of economic freedom. In Sen's framework, exclusion from
financial systems does not merely restrict consumption — it fundamentally limits people's
capacity to shape their own lives and participate in development, perpetuating cycles of
poverty and inequality.

2.3 Digital Financial Services and Mobile Money Ecosystems

Digital financial services encompass a broad range of products delivered through electronic
platforms: mobile money wallets, internet banking, electronic point-of-sale systems, and
ATM networks. The CGAP (2021) notes that digitizing financial services substantially lowers
delivery costs, accelerates transaction processing, and extends reach to populations that
brick-and-mortar banking cannot economically serve.
The African mobile money ecosystem represents one of the most significant financial
innovations in modern economic history. This ecosystem comprises MNOs, licensed
financial institutions, merchant networks, agent outlets, regulatory bodies, and end-users, all
interacting through interconnected digital platforms. Gates (2015) argues that this
architecture has the potential to fundamentally democratize finance globally, enabling those
without bank accounts to participate in modern economic systems through devices they
already own.
Jack and Suri's (2011) landmark study of M-Pesa in East Africa provided compelling
empirical evidence that mobile money meaningfully reduces transaction costs, accelerates
financial transfers, and improves household financial resilience. Within Tanzania, FinScope
Tanzania (2023) documented that mobile money account penetration now substantially
exceeds formal bank account ownership, reflecting a fundamental structural shift in how
Tanzanians access financial services.

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A critical counterpoint is offered by Castells (2010), who cautions that digital financial
expansion risks deepening inequality by creating a two-tier system: those with digital
connectivity and literacy who benefit, and those without who remain excluded.

2.4 Theoretical Frameworks

2.4.1 Financial Intermediation Theory
Originating with Gurley and Shaw (1960) and elaborated by Stiglitz (1993), Financial
Intermediation Theory positions financial institutions as essential conduits connecting savers
and borrowers in a manner that optimizes capital allocation across the economy. Applied to
Tanzania's digital financial landscape, both MNOs and commercial banks function as digital
intermediaries. Vodacom Tanzania through M-Pesa collects customer deposits within its
mobile wallet ecosystem, facilitates fund transfers, and enables credit access. NMB Bank
and TCB similarly mobilize deposits through digital channels and deploy them as credit,
supporting productive investment. The theory's limitation is its assumption that effective
intermediation alone drives inclusion — a view challenged by the reality that structural
constraints including poverty, illiteracy, and infrastructure deficits can persist regardless of
intermediary efficiency.

2.4.2 Diffusion of Innovation Theory

Rogers (2003) proposed that innovations spread through societies via communication
networks, with adoption rates determined by an innovation's relative advantage, compatibility
with users' lives, complexity, trialability, and observability. M-Pesa's rapid diffusion across
Tanzania illustrates Rogers' framework effectively — the platform offered unambiguous
advantages over traditional banking: no recurring account charges, instant credit based on
mobile transaction history, and savings management through an ordinary mobile phone.
Rogers also acknowledges, however, that resistance driven by unfamiliarity, limited digital
skills, or distrust of technology explains why digital illiteracy persists as a barrier to financial
inclusion in Tanzania.

2.4.3 Technology Acceptance Model (TAM)

Davis (1989) developed TAM to explain technology adoption through two primary
determinants: perceived usefulness and perceived ease of use. Tanzania's mobile money
adoption patterns align closely with TAM predictions. M-Pesa's zero-maintenance-fee model,
instant loan approvals based on transaction history, and intuitive interface reduced both
functional and psychological barriers to adoption. TAM's limitation is its individualistic focus,
which tends to underweight structural factors such as income poverty, network infrastructure
gaps, and regulatory environments that also shape adoption outcomes.

2.5 Empirical Evidence

Demirguc-Kunt et al. (2022) demonstrated across a multi-country analysis that digital
financial services substantially improve financial access among lower-income populations,
primarily by reducing service delivery costs. Donovan (2012) established a direct link
between mobile money adoption and SME development, finding that digital payment
systems simplify cash management, reduce transaction risks, and improve business record-
keeping. Bank of Tanzania research confirmed that interoperability among mobile money
providers improved efficiency and strengthened the digital financial ecosystem. Against
these gains, Kshetri (2019) warns that digitizing financial services simultaneously increases
exposure to cybercrime, identity theft, and financial fraud.

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2.6 Policy and Regulatory Context
Tanzania's financial inclusion policy architecture is anchored by the National Financial
Inclusion Framework, currently NFIF III (2023-2028), which prioritizes digital financial
expansion, financial literacy enhancement, and strengthened consumer protection. The
Bank of Tanzania's regulatory instruments — covering electronic money issuers, agent
banking, AML/CFT compliance, and interoperability — create the governance architecture
within which MNOs and banks operate. While this framework has been broadly supportive of
innovation, compliance costs associated with stringent regulatory requirements can
disadvantage smaller operators and constrain service extension to remote communities.

2.7 Identified Research Gap

Existing scholarship tends to examine MNOs and banking institutions in isolation. Few
studies have comprehensively mapped the combined ecosystem of MNO-bank partnerships,
government policy, and regulatory frameworks as an integrated system driving financial
inclusion. Furthermore, granular field evidence on specific collaborative products — such as
TCB's Mkoba, CRDB's Songesha, and Amana Bank's Halal Pesa — remains
underrepresented in the academic literature. This study addresses that gap.

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CHAPTER THREE: RESEARCH METHODOLOGY
3.1 Research Design
This study employed a descriptive and analytical research design, integrating qualitative
field-based data collection with comprehensive desk research. This combination was chosen
to balance empirical depth — capturing real-world operational realities from the field — with
theoretical and contextual breadth provided by secondary sources.

3.2 Data Sources

Primary Data: Gathered through field visits, structured observations, and key informant
interviews conducted in May 2026 with representatives and agents from Vodacom Tanzania
(M-Pesa) and Airtel Tanzania (Airtel Money), as well as branch-level staff and publicly
accessible institutional information from NMB Bank Plc and Tanzania Commercial Bank.
Secondary Data: Drawn from peer-reviewed academic journals, Bank of Tanzania annual
reports, national financial inclusion surveys, government policy documents, and official
institutional websites and publications.

3.3 Institutions Studied

Mobile Network Operators: Vodacom Tanzania (M-Pesa) and Airtel Tanzania (Airtel
Money) were selected as the primary MNOs given their scale of operations, market
significance, and depth of partnership networks with commercial banks.
Commercial Banks: NMB Bank Plc and Tanzania Commercial Bank (TCB) were selected
based on their active role in developing MNO-linked financial products and their reach into
underserved communities through agent banking and digital partnerships.

3.4 Regulatory Review

The study reviewed the National Payment Systems Act Cap. 437, Electronic Money
Regulations, Agent Banking Guidelines, Consumer Protection Regulations, and the National
Financial Inclusion Framework III (2023-2028) to assess the regulatory environment shaping
digital financial service delivery.

3.5 Analysis Approach

Data were analyzed through qualitative content analysis, organizing interview responses,
field observations, and document reviews thematically around the study's core objectives:
MNO contributions, bank-MNO collaborations, government initiatives, regulatory
frameworks, and challenges to financial inclusion.

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CHAPTER FOUR: FINDINGS AND DISCUSSION
4.1 How MNOs Are Driving Financial Inclusion
a) Access to Financial Services
Field evidence from Vodacom Tanzania and Airtel Tanzania confirms that MNOs have
fundamentally restructured financial access in Tanzania. Both platforms enable users to
conduct a full range of financial transactions — transfers, bill payments, airtime purchases,
savings, and credit — without requiring a conventional bank account, using any basic mobile
phone from virtually any location in the country.
A particularly significant finding from Vodacom M-Pesa field interviews is the platform's zero-
fee account model: customers incur no charges simply for maintaining an M-Pesa account,
and no recurring fees apply to account ownership. This removes a fundamental barrier that
historically discouraged low-income individuals from engaging with formal financial services.
Combined with the ability to apply for and receive loans instantly based on accumulated
mobile transaction history — without visiting a branch or completing lengthy documentation
— M-Pesa has made financial access genuinely practical for populations that formal banking
could not reach.
Airtel Money complements this landscape through its own broad agent network, enabling
customers in geographically remote areas to conduct deposits, withdrawals, and transfers
through nearby agents rather than distant bank branches.

b) Savings Mobilization
Vodacom M-Pesa enables customers to own functional savings accounts operated entirely
through their mobile phones, with interest accruing on balances. Field interviews confirmed
that this model encourages savings discipline among users who previously had no secure
mechanism for setting aside money. The availability of interest-bearing mobile savings has
meaningfully increased public engagement with formal savings behavior, with users
reporting that the security and accessibility of mobile savings accounts makes them more
practical than traditional savings instruments.

c) Money Transfers
Both M-Pesa and Airtel Money have revolutionized domestic money transfers, replacing
expensive, slow, and unreliable informal transfer channels with instant digital transactions.
Field evidence highlighted that M-Pesa has integrated international remittance capabilities,
enabling diaspora Tanzanians to send funds directly to family members' M-Pesa wallets,
significantly reducing costs compared to traditional international transfer services.

d) Rural Financial Access

The geographic reach of MNO agent networks has been transformative for rural financial
inclusion. M-Pesa and Airtel Money agents are present in villages and remote settlements
where no bank branch has ever existed, enabling rural households to receive agricultural
payments, government transfers, and family remittances through a nearby agent rather than
travelling to distant urban centers.

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e) SME Development
Field interviews with business operators revealed that mobile money has materially changed
how small enterprises manage their finances. M-Pesa enables SME operators to receive
customer payments digitally, access working capital through instant mobile credit tied to their
transaction history, and maintain better financial records through transaction logs — all
without maintaining a formal bank account.

4.2 Commercial Bank Contributions Through MNO Partnerships

a) Mobile Banking
NMB Bank and Tanzania Commercial Bank have both invested significantly in mobile
banking platforms that allow customers to access the full range of banking services
remotely. Account management, fund transfers, utility payments, and airtime purchases are
all available without branch visits, substantially reducing transaction costs and extending
service convenience to customers across Tanzania.

b) Agent Banking
Both NMB Bank and TCB deploy agent banking networks as a deliberate strategy for
reaching populations beyond their branch footprints. Field evidence confirmed that agent
banking has meaningfully reduced the travel burden for rural customers while simultaneously
reducing congestion at formal branch locations.

c) Bank-MNO Partnership Products

The most compelling evidence of how commercial bank-MNO collaboration drives financial
inclusion emerged from specific partnership products identified during field research:
TCB's Mkoba Service (in partnership with Vodacom): Mkoba is a digital fundraising and
collective savings platform designed specifically for community-based financial groups —
including family savings groups, friend circles, VICOBA groups, and Village Savings and
Loan Associations (VSLAs). Through Mkoba, group members can contribute money
collectively, save toward shared goals, raise funds for specific purposes, purchase shares,
and extend small loans to one another at mutually agreed, affordable interest rates.
CRDB's Songesha Service (in partnership with Vodacom): Songesha functions as a
micro-credit buffer that enables M-Pesa customers to complete transactions even when their
wallet balance is insufficient. This innovation prevents the frustrating and economically costly
experience of failed transactions due to insufficient balance — a particularly important
capability for low-income users managing tight cash flows.
DTB's Mgodi Service (in partnership with Vodacom): Diamond Trust Bank's Mgodi
service allows M-Pesa customers to save money systematically and access long-term loans,
extending the time horizon of financial planning available through the mobile money
platform.
Amana Bank's Halal Pesa (in partnership with Vodacom): Halal Pesa represents a
Sharia-compliant financial inclusion product enabling M-Pesa customers to save, invest, and
access financing entirely without earning or paying interest. Users can deposit savings
securely, contribute to religious and social activities, and access financing structured around
profit-sharing principles rather than interest charges. This product demonstrates how MNO-
bank partnerships can address not only geographic and income barriers but also cultural and
religious ones.

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d) Mobile Credit Products
Beyond partnership-specific credit products, both NMB Bank and TCB offer mobile credit
facilities enabling customers to apply for and receive loans through mobile platforms without
extensive paperwork or branch visits. Field evidence from Vodacom confirmed the mutual
commercial benefit: CRDB-Vodacom smartphone financing partnerships allow customers to
acquire smartphones by paying an initial deposit and repaying through M-Pesa. The
resulting growth in smartphone ownership directly increases mobile data consumption,
raising Vodacom's data revenue while simultaneously enabling more customers to access
richer digital financial services — a commercially self-sustaining cycle with genuine financial
inclusion benefits.

e) Merchant Payment Systems

The adoption of merchant payment systems across Tanzania's retail and service economy
has accelerated the normalization of cashless transactions. Both M-Pesa and Airtel Money
merchant payment solutions are accepted by businesses from urban supermarkets to rural
market vendors, reducing cash handling risks, improving transaction speed, and creating
digital payment records that can serve as financial histories for future credit assessment.

4.3 Government Initiatives Supporting Financial Inclusion

National Financial Inclusion Framework (NFIF III, 2023-2028): The current iteration of
Tanzania's national financial inclusion strategy provides a structured, multi-year roadmap
with explicit targets for expanding digital financial access, improving financial literacy, and
strengthening consumer protection mechanisms, coordinating actions across government
agencies, regulators, MNOs, and financial institutions.
Digital Economy Initiatives: Government directives mandating digital payment channels for
tax collection, utility billing, and public service fees have normalized digital transactions for
millions of Tanzanians, serving as an effective on-ramp into the digital financial ecosystem
for populations new to mobile payments.
ICT Infrastructure Investment: Government investment in national fiber-optic networks and
rural connectivity projects has created the foundational infrastructure upon which digital
financial services depend. For Vodacom specifically, the expansion of 4G and 5G network
coverage — supported by improved national connectivity infrastructure — has directly
enhanced M-Pesa's reliability and geographic reach.
SIM Registration and Digital Identity: The government's SIM registration mandate,
implemented through NIDA biometric registration, has created a reliable digital identity
infrastructure. Vodacom's M-Pesa account registration requires biometric NIDA verification,
ensuring every account holder's identity is independently confirmed — a foundational
requirement for anti-fraud and AML compliance.

4.4 Bank of Tanzania Regulatory Framework

Licensing and Supervision: The Bank of Tanzania licenses and actively supervises all
mobile money operators, ensuring compliance with operational, capital, and consumer
protection standards. Vodacom Tanzania's M-Pesa operates within the BOT cybersecurity
framework and is subject to comprehensive licensing requirements.
Electronic Money Issuer Requirements: A critical consumer protection mechanism is
BOT's requirement that M-Pesa customer funds be held in dedicated trust accounts, entirely
segregated from Vodacom's operational funds. BOT regulations further restrict the interest

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income that can be earned on these trust balances, ensuring customer deposits are not
exposed to commercial risk.
Transaction and Wallet Limits: BOT establishes boundaries for daily transaction values
and maximum wallet holding amounts on mobile money platforms, dictating exactly how
much capital customers can move or store through M-Pesa. These limits manage systemic
risk while ensuring the platform serves its intended transactional and savings purpose.
Consumer Protection: Vodacom deploys a multi-layered consumer protection architecture
aligned with BOT requirements. Customer identity is verified through biometric NIDA
registration during account opening, preventing unauthorized SIM swaps and identity theft.
All customer data is protected under strict data privacy policies compliant with Tanzania's
Personal Data Protection Act.
AML/CFT Compliance: Vodacom must routinely report large transactions to BOT and
conduct stringent KYC procedures using NIDA biometric verification. The company
maintains a dedicated AML team headed by a formally appointed Money Laundering
Reporting Officer (MLRO), who investigates suspicious transaction patterns and files
mandatory reports with the national Financial Intelligence Units (FIUS) when red flags are
identified.
Interoperability: BOT's interoperability mandate requires that mobile money platforms from
different network operators connect seamlessly, enabling customers to transact across
network boundaries. This regulation has significantly reduced market fragmentation and
improved overall system utility.
Regulatory Benefits and Challenges: BOT's regulatory framework has created a trusted,
stable digital financial environment. However, compliance requirements — including AML
monitoring systems, biometric KYC infrastructure, cybersecurity protocols, and mandatory
reporting — impose substantial operational costs that fall unevenly across the market, with
smaller institutions facing proportionally heavier burdens.

4.5 Challenges to Financial Inclusion

Digital Illiteracy: A significant proportion of Tanzania's population lacks the foundational
digital skills needed to use mobile financial services effectively. Vodacom has responded
through targeted educational programs and Pan-African upskilling initiatives directed at
youth, students, and underserved communities.
Cybersecurity Threats: Growing reliance on digital financial platforms increases exposure
to cyber attacks, data breaches, and unauthorized system access. Vodacom has committed
substantial investment to modernizing IT infrastructure, deploying 4G/5G networks with
integrated cybersecurity mechanisms, and building internal cybersecurity talent pipelines.
Fraud: Mobile money fraud — encompassing fake transaction alerts, SIM swap attacks,
unauthorized account access, and social engineering scams — remains a persistent threat.
Vodacom deploys AI-powered monitoring systems capable of identifying abnormal
transaction patterns and immediately suspending accounts where fraud is detected.
Agent Liquidity Constraints: The reliability of agent networks depends critically on agents
maintaining adequate cash float. When agents lack sufficient liquidity to process withdrawals
— particularly common in remote areas — service continuity breaks down precisely in
communities most dependent on agent-based access.

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Taxation: Transaction levies applied to mobile money transfers increase the effective cost of
digital financial services, disproportionately affecting low-income users who conduct frequent
small transactions.
Network Coverage Gaps: Despite ongoing 4G/5G network expansion, significant
connectivity gaps persist in Tanzania's most remote regions, limiting digital financial service
accessibility regardless of product design.
Regulatory Compliance Costs: The financial and operational burden of meeting BOT's
regulatory requirements falls unevenly across the market, with smaller institutions facing
compliance costs that limit their capacity to reach marginalized communities.

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CHAPTER FIVE: CONCLUSION
Tanzania's digital financial inclusion transformation has been driven by the convergence of
MNO innovation, commercial bank partnership, government policy, and regulatory
governance. Vodacom Tanzania through M-Pesa and Airtel Tanzania through Airtel Money
have extended financial services to millions of previously excluded Tanzanians through
accessible, affordable platforms characterized by zero-maintenance fees, instant mobile
credit, widespread agent networks, and mobile savings products.
Their commercial bank partners have amplified this reach through purpose-designed
collaborative products: TCB's Mkoba formalizes community savings culture within a
regulated digital framework; CRDB's Songesha ensures transaction continuity for users with
insufficient balances; DTB's Mgodi supports long-term savings and credit planning; and
Amana Bank's Halal Pesa extends Sharia-compliant financial inclusion to Muslim
communities.
Government frameworks — particularly NFIF III and the national digital identity infrastructure
built on NIDA biometric registration — have provided the policy scaffolding and identity
verification backbone that enable digital financial services to scale securely. The Bank of
Tanzania's regulatory architecture, encompassing trust account protections, transaction
limits, AML compliance requirements, consumer protection standards, and interoperability
mandates, has created a governance environment that balances innovation with systemic
stability and consumer safety.
Persistent challenges around digital illiteracy, cybersecurity, fraud, agent liquidity, taxation,
network coverage, and compliance costs continue to constrain the full realization of financial
inclusion goals. The overarching conclusion is that Tanzania's financial inclusion progress is
fundamentally a product of collaborative ecosystems — and sustaining that progress
demands deepening collaboration between MNOs, banks, government, and the regulatory
authority.

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CHAPTER SIX: RECOMMENDATIONS
To Mobile Network Operators
• Accelerate rural network expansion by prioritizing 4G/5G rollout in underserved
regions where connectivity gaps most severely limit financial access.
• Revisit transaction fee structures for low-value transactions to ensure pricing does
not exclude the poorest users.
• Scale digital literacy initiatives — particularly Pan-African upskilling programs
targeting youth, students, and rural communities — to build user competence
necessary for sustainable platform adoption.
• Invest further in AI-powered fraud detection and real-time account monitoring to stay
ahead of evolving digital financial crime.
• Develop structured agent liquidity management programs, including float financing
mechanisms, to ensure reliable service delivery in remote agent networks.

To Commercial Banks
• Deepen agent banking penetration into underserved rural communities using data-
driven deployment strategies to identify areas with the highest inclusion potential.
• Replicate and adapt successful partnership models — such as Mkoba's community
savings design and Halal Pesa's Sharia-compliant framework — to serve other
specific community needs.
• Invest in financial literacy programs tailored to digital banking product users,
improving both adoption rates and responsible usage.
• Strengthen reciprocal data-sharing arrangements with MNO partners to enable more
sophisticated credit assessment for customers without traditional credit histories.

To the Government
• Review the taxation framework applicable to mobile money transactions, assessing
whether current levy structures create unintended barriers to adoption among low-
income users.
• Sustain and accelerate ICT infrastructure investment in rural areas, recognizing that
digital connectivity is a prerequisite for financial inclusion.
• Institutionalize digital literacy within the national education curriculum to build long-
term foundational capacity for digital financial participation.
• Create incentive structures — including tax benefits or subsidy mechanisms — that
encourage MNOs and banks to extend commercially marginal services into remote
communities.

To the Bank of Tanzania

• Develop a tiered regulatory compliance framework that calibrates requirements
proportionally to institutional scale and risk profile.
• Strengthen proactive fraud monitoring and consumer redress mechanisms,
particularly focused on SIM swap fraud and social engineering attacks targeting
mobile money users.
• Continue advancing interoperability frameworks to cover emerging payment channels
and ensure no new digital financial platform creates exclusionary barriers.

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• Enhance supervisory capacity for AI-powered financial services as algorithmic credit
and risk assessment products grow in prevalence.

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REFERENCES
Bank of Tanzania. (2023). Annual report on payment systems and financial inclusion. Bank
of Tanzania.
Castells, M. (2010). The rise of the network society (2nd ed.). Wiley-Blackwell.
Consultative Group to Assist the Poor (CGAP). (2021). Digital financial services: An
overview. CGAP.
Davis, F. D. (1989). Perceived usefulness, perceived ease of use, and user acceptance of
information technology. MIS Quarterly, 13(3), 319-340. [Link]
Demirguc-Kunt, A., Klapper, L., Singer, D., & Ansar, S. (2022). The Global Findex Database
2021: Financial inclusion, digital payments, and resilience in the age of COVID-19. World
Bank. [Link]
Donovan, K. (2012). Mobile money for financial inclusion. In T. Kelly & M. Rossotto (Eds.),
Information and communications for development 2012 (pp. 61-73). World Bank.
FinScope Tanzania. (2023). FinScope consumer survey Tanzania 2023. Financial Sector
Deepening Trust.
Gates, B. (2015). 2015 Gates annual letter: Our big bet for the future. Bill & Melinda Gates
Foundation.
Gurley, J. G., & Shaw, E. S. (1960). Money in a theory of finance. Brookings Institution.
International Telecommunication Union (ITU). (2021). Measuring digital development: Facts
and figures 2021. ITU.
Jack, W., & Suri, T. (2011). Mobile money: The economics of M-PESA. NBER Working
Paper No. 16721. National Bureau of Economic Research. [Link]
Kshetri, N. (2019). Cybercrime and cybersecurity in Africa. Journal of Global Information
Technology Management, 22(2), 77-81. [Link]
Rogers, E. M. (2003). Diffusion of innovations (5th ed.). Free Press.
Sen, A. (1999). Development as freedom. Oxford University Press.
Stiglitz, J. E. (1993). The role of the state in financial markets. World Bank Economic
Review, 7(Suppl. 1), 19-52. [Link]
United Republic of Tanzania. (2023). National Financial Inclusion Framework III (2023-
2028). Ministry of Finance and Planning.
Vodacom Tanzania. (2024). Annual report and financial statements 2023/2024. Vodacom
Tanzania Public Limited Company.
World Bank. (2022). Financial inclusion overview.
[Link]

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APPENDICES
Appendix A: Summary of Field Interview Findings — Vodacom
Tanzania / M-Pesa (May 2026)
• No charges apply for simply maintaining an M-Pesa account; zero recurring fees for
account ownership.
• Loan applications processed and approved instantly based on mobile money
transaction history.
• Customers can own and operate savings accounts entirely through their mobile
phones, earning interest on balances.
• Vodacom-CRDB smartphone financing partnership enables customers to acquire
smartphones through minimal initial deposits repaid via M-Pesa; increased
smartphone penetration drives higher mobile data consumption.
• M-Pesa customer funds held in BOT-mandated trust accounts; BOT restricts interest
earned on trust balances.
• BOT sets daily transaction value limits and maximum wallet holding amounts for M-
Pesa.
• Vodacom subject to BOT cybersecurity framework and AML regulations; large
transactions reported routinely.
• All new SIM and M-Pesa accounts registered through biometric NIDA verification.
• Dedicated AML team and formally appointed MLRO investigate suspicious
transactions and file reports with FIUS.
• AI-powered monitoring flags abnormal activities; accounts suspended immediately
upon fraud detection.
• Customer data protected under data privacy policies aligned with the Personal Data
Protection Act; data never sold to third parties.
• Vodacom investing billions in 4G/5G infrastructure with integrated cybersecurity
mechanisms.
• Digital literacy addressed through targeted educational programs and Pan-African
upskilling initiatives for youth and underserved communities.
• Key challenges identified: security risk and fraud, agent cash flow and liquidity
constraints, mobile money transaction taxation.

Appendix B: Bank-MNO Partnership Products Identified During Field

Research
Partnership Bank MNO Product Core Function
Songesha CRDB Bank Vodacom Micro-credit buffer Completes M-Pesa
transactions when
balance is insufficient

Digital CRDB Bank Vodacom Device credit Smartphone loans via

Smartphone minimal deposit;
Financing repayment through M-
Pesa

Mgodi DTB Vodacom Long-term savings & Systematic mobile

loans savings and long-term
credit access

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Partnership Bank MNO Product Core Function
Mkoba TCB Vodacom Community savings Digital platform for
group savings,
fundraising, and micro-
lending

Halal Pesa Amana Bank Vodacom Sharia-compliant Interest-free savings,

finance investment, and
financing for Muslim
customers

Page 18 | Financial Inclusion in Tanzania